More demand for websites and domain names
Social distancing is driving migration to online activities
Social distancing is driving migration to online activities
Almost everything has been directly or indirectly affected by the restrictions imposed to prevent the spread of COVID-19. Including the market for domain names and websites. Some market players have experienced a downturn, while others have seen increased demand for online services. That mixed picture comes from a survey of hosting providers and SMEs that we recently commissioned. Meanwhile, our own data shows that the overall number of domain names in the Netherlands continues to grow at about the same rate as before the crisis.
Since the restrictions came into force, Dutch people and businesses have registered just over 85,000 .nl domain names. That's ten thousand up on the same period in 2019. A small proportion of the names – 2 or 3 per cent – are COVID-19-related. The vast majority of registrations have no connection to the crisis, however. The same period saw a small rise in the number of players directly offering .nl registrations, from 1,186 to 1,206. While registrations were up, cancellations also increased in March. That observation should be interpreted cautiously, however: a cancellation spike is normal at the end of the calendar quarter. Demand has continued to rise as April has gone on.
Demand growth is being driven mainly by business registrations, particularly start-ups. In a questionnaire-based survey conducted for us by research bureau GfK, all the start-ups who responded said that they had registered their domain names for use in online business activities. It's the first time that no survey respondents have said they were planning offline business start-ups. That may well reflect the circumstances surrounding the current pandemic.
While the demand for domain names remains fairly steady, the demand for business mailboxes, websites and webshops is definitely up. Last week, website builder Wix.com reported significantly stronger demand as companies adjusted their priorities in favour of online activities. Dutch market players have experienced a similar shift: before March of this year, 30 per cent of all domain names were being used for mail or websites, but service providers are reporting active use levels of 40 to 50 per cent for new registrations. That seems to be mainly due to the creation of new webshops.
Many of the businesses now starting up online are targeting regional or local markets. That's one of the reasons why the proportion preferring .nl to the more international .com rose from 69 per cent to 76 per cent. Firms with international ambitions still tend to opt for .com. Interest in other extensions (.eu, .net, .org) is down.
Another striking trend is the increasing importance attached to cybersecurity. Nearly 30 per cent of businesses rated the threat from cybercrime as significant. However, it's hard to assess the extent to which that reflects increased dependency on the internet since the imposition of social distancing measures. Survey respondents' replies suggest that a high-profile ransomware incident involving the University of Maastricht has also played a role. Indeed, ransomware is now seen as the biggest single security threat to businesses.
Unfortunately, despite what the findings outlined above might suggest, not all internet-based business activities are thriving. Some service providers report that conditions are difficult for their customers. Website builder Wix.com expects that the previously mentioned demand upturn will be cancelled out by a decline in business from the travel and leisure industries, for example. The world's biggest registrar, GoDaddy, is also predicting a small earnings dip in the second quarter.
Perhaps the standout conclusion to date is that the Netherlands appears to be benefitting from the great strength of its internet infrastructure. The country's high website and domain name densities, the comprehensive range of online services and the near-universal availability of broadband access are crucial enabling factors. We have a landscape that offers opportunities, where local and regional market players are able to develop online activities for which there was previously little demand.